IRS Scandal Ends With a Whimper

With Edward Snowdon on his whirlwind tour of countries unfriendly to the United States and the Supreme Court handing down a bunch of important decisions, this is a good week for stories to get lost in the back pages. So you may not have noticed that late yesterday, the IRS scandal, supposedly Worse Than Watergate™, came to a sputtering halt with the release of new documents in the investigation. The whole scandal, you'll recall, is about how conservative groups applying for 501(c)(4) status were given extra scrutiny, while other kinds of groups just slid by. Well, it turns out, not so much:

The instructions that Internal Revenue Service officials used to look for applicants seeking tax-exempt status with "Tea Party" and "Patriots" in their titles also included groups whose names included the words "Progressive" and "Occupy," according to I.R.S. documents released Monday.

The documents appeared to back up contentions by I.R.S. officials and some Democrats that the agency did not intend to single out conservative groups for special scrutiny. Instead, the documents say, officials were trying to use "key word" shortcuts to find overtly political organizations — both liberal and conservative — that were after tax favors by saying they were social welfare organizations.

But the practice appeared to go much farther than that. One such "be on the lookout" list included medical marijuana groups, organizations that were promoting President Obama's health care law, and applications that dealt "with disputed territories in the Middle East."

Taken together, the documents seem to change the terms of a scandal that exploded over accusations that the I.R.S. had tried to stifle a nascent conservative political movement. Instead, the dispute now revolves around questionable sorting tactics used by I.R.S. application screeners.

Questionable sorting tactics! Not quite the scandal of the century. So why did the Inspector General's report that started this whole thing characterize it only as the singling out of conservative groups, ignoring the fact that liberal groups got treated unfairly too, and with the same means, the BOLO ("be on the lookout" memo) that instructed agents to give special scrutiny to certain kinds of groups? Steve Benen points out that the Inspector General (IG) was responding to a request from Darrell Issa to investigate the treatment of conservative groups, so that's the likely reason his inquiry was restricted in that way. So Issa first asked the IG for a restricted investigation, then he released excerpts of interviews with IRS officials cherry-picked to make things look worse than they actually were, and now this.

But this "scandal" was already dying. Despite the most fervent wishes of conservatives, there hasn't been any actual evidence showing that orders to crush the Tea Party came right from the White House. So in the last few weeks they've been reduced to arguing that there was a conspiracy of winks and nods, whereby everybody just knew what to do, even if nobody actually told anybody what to do. President Obama gave a speech criticizing "dark money," and IRS agents swung into action! Or maybe there was a real conspiracy, but we just haven't found it yet despite all the looking ("Some person or persons made the decision to target, harass, delay and abuse," wrote Peggy Noonan. "Some person or persons communicated the decision. Some persons executed them."). You can sustain that for a while, but eventually, you have to produce something real. You can't just speculate forever.

And frankly, I'm not sure there's anything wrong with these BOLO lists per se. If you have a situation where a bunch of similar groups are being created all at the same time and they all appear to be political groups masquerading as social welfare organizations, it's perfectly reasonable to group them together and have the same agents develop an understanding of what they do and whether they deserve tax-exempt status. The problem isn't that they got put into a pile, it's what happens afterward. And what's been really appalling from what we've learned is that the IRS agents seemed to have only the barest understanding of what the law was and how they were supposed to apply it. Maybe once this is all over, we can get around to fixing that.

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